With nearly all the votes counted in Sunday’s general election, Hungary’s governing Fidesz party looks set to maintain its overwhelming majority in parliament for the next four years, while its far-right rival Jobbik was supported by more people than opinion polls had suggested. Below is a roundup of analysts’ views about the election outcome.

BUDAPEST–Hungary’s competition authority Wednesday levied its highest ever fine in a cartel case against the country’s largest banks, saying they had discouraged home owners with a foreign-currency mortgage from taking part in a program aimed at reducing their loans.

GVH said it had used emails and the banks’ internal documents to establish that they had coordinated actions between September 2011 and January 2012 to disuade mortgage borrowers from participating in a scheme aimed at lowering the financial burden on home-owners with foreign-currency loans.

Under the scheme, borrowers could pay back their foreign-currency mortgage in full and at a discounted exchange rate favorable for them. Banks were to book the arising losses.

The GVH considered the banks’ losses as well as tight liquidity and limited staffing to perform the task over a short period of time as mitigating factors in its decision, it said.

The banks fined command over 90% of the country’s banking market, which the GVH has considered to be an aggravating factor in its decision, it added.

GVH fined 11 Hungarian banks a total of 9.49 billion forints ($43.1 million), with the largest amount–HUF3.92 billion–being levied on the country’s biggest lender OTP Bank Nyrt. OTP said the fine is unfounded and will take legal action. Read More »

BUDAPEST–Hungary’s banking sector is set to consolidate in the medium to longer term, with some foreign-owned banks expected to exit the country to stem losses, leaving smaller lenders with a bigger share of the market, the country’s central bank said Thursday.

The banking sector has been plagued by low profitability, particularly among big lenders which have booked losses for several years, the National Bank of Hungary said in its Financial Stability report. This trend has been exacerbated by a series of punitive taxes introduced across the sector since 2010, as the government of Viktor Orban’s populist Fidesz party has sought to discourage foreign ownership of Hungary’s banks.

“If this situation becomes permanent, the consolidation of the banking sector could accelerate,” Marton Nagy, the central bank’s managing director, told reporters. “Big banks are deleveraging massively and shedding their external exposure,” he said, without specifying which banks may leave the country.

The government is reshuffling the status of banks, raising the burdens on incumbent banks while going easier on new banks, Mihaly Patai, head of UniCredit’s Hungarian unit said Thursday, according to state news agency MTI. Hungarian banks would be loss-making even without the government’s special taxes, he added. Read More »

Investors have thrown their weight behind the Hungarian government, generating ample demand for a sovereign bond issue in U.S. dollars and buying more government bonds in forints than were offered. The solid investor showing comes on hopes the country will revamp its budget, despite warnings from a rating agency that such hopes may prove premature.

A prominent government official, meanwhile, confirmed the government’s commitment to implementing the planned budget savings as well as to lowering inflation, which has been in doubt recently.

Hungary is rated by all three major rating agencies one notch from junk status thus the success of the bond sales is a major victory for the government, which has heard many bitter words about its market-unfriendly economic policy. Read More »

Forty years of Communism and the 1968 Soviet Army-led invasion of Czechoslovakia have molded the general view Czechs of today’s Russia. It’s more than understandable.

Associated Press

Unfortunately the painful historical lessons have also distorted the way Czechs view today’s Russia and its seeming muscle-flexing evidenced by the Kremlin’s cheering of the scrapped missile defense shield, with installations planned in the Czech Republic and Poland, by U.S. President Barack Obama.

Although the NATO-member country faces no military threats from any nation, with no U.S. army presence on Czech soil, the Czech Republic may now become an economic colony of Russia, the local shield supporters warn. Read More »

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Emerging Europe Real Time provides sharp analysis and insight into what’s making news in Central and Eastern Europe. Drawing on the expertise of our reporters in the Czech Republic, Hungary, Poland, Russia and Turkey, the site provides an inside track on economics, politics and business in this emerging part of the European continent.